TORONTO, Dec 6 (Reuters) - Loblaw Companies Ltd,
Canada's largest grocer, said on Thursday it plans to spin off
the vast majority of its property assets into a real estate
investment trust, sending its stock and that of its parent,
George Weston, surging higher.

The move, which will create one of Canada's biggest REITs,
is a way to allow Loblaw to reinvest in its core business and
boost shareholder value. Loblaw shares jumped more than 24
percent in early trading, while George Weston rose 11 percent.

The company said it plans to spin off real estate worth more
than C$7 billion ($7.05 billion) into the REIT and sell units of
the trust through an initial public offering that it hopes to
complete by mid-2013.

"We are announcing this today because we feel the timing is
right for both our business and the capital markets," said Galen
Weston, Loblaw's executive chairman, on a conference call. "The
size and quality of our real estate assets should be appealing
to investors."

Canadian REITs have outperformed the broader stock market
due to strong demand for commercial and retail real estate.
Economic growth has boosted demand for office space in Canada,
while U.S. retailers compete for prime retail space for their
Canadian growth plans.
Continued...